{"id":186085,"date":"2025-01-30T18:30:16","date_gmt":"2025-01-30T07:30:16","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=186085"},"modified":"2025-01-31T11:45:50","modified_gmt":"2025-01-31T00:45:50","slug":"how-much-do-you-really-need-to-earn-to-afford-a-1-million-property","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/how-much-do-you-really-need-to-earn-to-afford-a-1-million-property\/","title":{"rendered":"How Much Do You Really Need to Earn to Afford a $1 Million Property?"},"content":{"rendered":"

With more suburbs reaching the million-dollar mark, many potential homebuyers are left wondering just how much they need to earn to join the million-dollar homeowners club.<\/p>\n

You may be surprised to learn that the salary required to buy a $1 million property isn't as high as you might think.<\/p>\n

\"Buying<\/p>\n

What does it take to buy a $1 million home?<\/span><\/h2>\n

According to new data from Money.com.au<\/a>, the numbers reveal that to purchase a $1 million home with a 10% deposit ($100,000), a household pre-tax income of around $187,000 is required.<\/p>\n

That\u2019s about $93,500 per applicant if two people are sharing the mortgage, which is actually below the average Australian full-time salary of $100,016.<\/p>\n

But let\u2019s break this down further. \r\n

<\/div><\/p>\n

If you can save up a 20% deposit ($200,000), you\u2019d need a pre-tax household income of $165,000, or $82,500 per applicant.<\/p>\n

This would allow you to avoid the added cost of Lender\u2019s Mortgage Insurance (LMI), making the property purchase more cost-effective in the long run.<\/p>\n

These estimates assume an average variable mortgage rate of 6.27% over a 30-year term and that your combined monthly living expenses are around $4,000 with no dependents or other debts.<\/p>\n

Of course, stamp duty and other government charges come as extra costs on top of your deposit and income requirements.<\/p>\n

What\u2019s really the challenge?<\/span><\/h2>\n

The real hurdle for most aspiring homeowners isn\u2019t necessarily earning enough to service a mortgage\u2014it\u2019s coming up with the deposit.<\/p>\n

As Money.com.au\u2019s Home Loans Expert, Mansour Soltani points out:<\/p>\n

\"Saving up for a deposit of $100,000 or $200,000 can be a significant challenge, especially with rising living costs.\"<\/p><\/blockquote>\n

The property market is becoming increasingly competitive, and million-dollar homes are quickly becoming the norm across the country.<\/p>\n

But before you start thinking you need to chase after the next million-dollar property, Soltani also offers some sage advice:<\/p>\n

\"Sometimes, it\u2019s wiser to target a home under $1 million in a less fashionable suburb to avoid overextending your finances.<\/p>\n

The key is not to get swept up in the property frenzy, but rather, to make a decision based on what is financially sustainable for your lifestyle.\"<\/p><\/blockquote>\n